USA Law and Practice Contributed by: Courtney Scobie, Jack Edwards and Andrea Whitley, Ajamie LLP
American Convention on International Commer- cial Arbitration (the “Panama Convention”). This convention governs the recognition and enforce- ment of arbitral awards within the Americas. Arbitral awards can be confirmed and enforced in either federal or state court. Even though the FAA and international conventions favour recog- nising and enforcing arbitral awards, there are limited grounds upon which an award may be challenged. These grounds include fraud, cor- ruption, procedural irregularities, the arbitrator exceeding their authority, or if enforcing an arbi- tral award violates public policy. 13.2 Subject Matters Not Referred to Arbitration There are certain subject matters that may not be referred to arbitration, or for which arbitration may be subject to limitations or restrictions, as follows. • Certain employment claims – although many employment disputes are arbitrable, some employment claims may be subject to restric- tions, including claims related to wage-and- hour violations, workplace discrimination, sexual assault or harassment, or wrongful termination. • Certain regulatory matters – arbitration may not be available for certain regulatory dis- putes, including those related to environmen- tal regulations, zoning and land use, or public safety issues. • Patent validity and trade mark registration – patent validity and trade mark disputes are generally not arbitrable because they involve questions of federal law and require special- ised patent courts. • Family law and child custody – family law matters (such as divorce, child custody, and child support) are typically not arbitrable. The
public policy interest in ensuring the welfare of children and resolving family disputes by the court system leads to limitations on arbi- tration in these areas. 13.3 Circumstances to Challenge an Arbitral Award There are limited grounds on which an arbitral award can be challenged. These grounds are outlined in the FAA and apply to both domestic and international arbitration. • Fraud, corruption, or misconduct – a party may challenge an arbitral award if there is evi- dence of fraud, corruption, or other miscon- duct by an arbitrator or the opposing party. Such misconduct must have had a material impact on the award. • Exceeding arbitrator’s authority – if an arbi- trator exceeds their authority (eg, issues an award that goes beyond the scope of the arbitration agreement), a party can challenge the award. • Arbitrator bias or partiality – if the arbitra- tor exhibited bias or partiality that materially affected the award, the award may be chal- lenged. This bias can be evident from the arbitrator’s behaviour, actions or financial interests that show a lack of neutrality. • Due process violation or lack of arbitration agreement – if due process was not followed or there was no valid arbitration agreement, a party can challenge the award. • Public policy violation – an arbitral award that violates established public policy may be challenged. This ground is narrowly con- strued.
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